MiG Construction web site

What does the online shopping revolution mean for the Construction industry?

Business owners everywhere are preparing for the revolution of change resulting from approximately 51% of all consumer purchases being made online versus inside a brick and mortar store. A 2016 study by comScore, an analytics firm, estimates that this number will continue to grow by at least 1% every year. Consultants are working to prepare retail business owners for the impact of this increase by helping them integrate a strong online presence and to help them understand what measures can be taken to bring foot traffic into their storefronts. This topic has been examined from many angles to determine the impact on different areas of our lives both personally and professionally; but what does this mean for the construction industry? What are the benefits and opportunities that could come of this?

Small business owners of multiple industries are the first to take the hit. Going to a print shop for your business cards and photo printing is a thing of the past, and these days, so is going to a home décor store, gift shop and clothing retailer. Consumers can find exactly what they are looking for by simply typing it into a search engine. Within a matter of seconds, they see what they are looking for available at multiple retailers and for various prices. This allows the consumer to shop for the best deal and fastest shipping speed before making their purchase. Online giants like Amazon have set the industry expectation that online purchases will arrive at your doorstep within two business days, with shipping costs included in the product price. Other companies like Wal Mart are quickly following suit as not to lose out to the competition. Studies show fastest shipping speed is more important to the consumer than a price point that is 1-5% higher for the product. Consumers can even grocery shop online now, having fresh produce and food delivered to their door in two business days – or picked up curbside at the grocery store! With the direction we are moving with these modern conveniences, taking an afternoon stroll visiting storefronts in your local downtown area are becoming a thing of the past.

“We all know online retail is hurting the business of physical department stores. Instead of phasing out these stores 100%, they are building new creative flagship stores in places like the woodward avenue corridor, while the big boxes and malls empty and close. This is unfortunate for the retail industry, and for builders who specialize in the big-box retail model, but for custom and boutique contractors, it can actually open doors on some interesting projects.” -Stephen Barcus, Project Engineer, MiG Construction

There are some benefits to the construction industry resulting from this change because as more retailers add a warehouse for order processing and shipping, more buildings will need to be renovated and built. In addition to warehouse space, online retailers frequently need an accounting/customer service building as well that are sometimes at different locations. Though this may seem like a hassle to the business owner, their costs could actually go down from having to rent prime location space for their storefront. Warehouses can be built anywhere without concern of the population/demographic of shoppers. In addition to warehouses, shipping companies are building more warehouses as well to meet the demand of the famous 2-day shipping deadlines and the overall increase in packages.

“Following a decline of 2 percent in 2016, non-residential construction output is expected to rebound this year, expanding by 3.7 percent. The institutional segment was the only area of growth for the industry in 2016, and government stimulus spending will help the institutional segment grow by 6.8 percent this year. Beyond 2017, however, the institutional segment will provide a smaller boost to the industry, as government stimulus spending is projected to unwind.

Providing support to the industry’s commercial segment is the rise of online shopping, which is beginning to see a faster rate of adoption in Canada. This will help support a U.S.-style buildup in warehouses across the country.” -NBC 2 News